Inside Experts: The next wave of transparency for biopharmaceutical companies

When Congress passed the health care reform legislation in 2010, it included the Physician Payments Sunshine Act, which requires biopharmaceutical manufacturers to report (and make public) annual payments made to physicians. Under this law, payments or “transfers of value” under $10 would not be reportable if the aggregate spend for the calendar year was less than $100. Once that threshold is reached, all payments are reportable. Many companies have put forth the effort to set up systems that allow them to begin posting payment information to their websites well before the federal mandated timeframes. Others are working diligently to get systems in place to allow them to meet the Jan. 1, 2012, compliance date. This has been no small feat for these companies, as current company systems are not organized around the necessity to report information this way.

“Transparency” became the buzzword in the past several years, due in part to Senator Chuck Grassley’s, R-Iowa, efforts. Grassley, along with Senator Herb Kohl, D-Wis., began proposing “Sunshine Act” legislation in 2007, which eventually became law in 2010. Although it’s accepted that biopharmaceutical companies have bona fide business reasons for engaging with physicians, Grassley and others believe shining a light on these business relationships will allow patients to be better informed in managing their relationships with physicians. It’s not entirely clear at this point whether patients will use this information or find it valuable. Some investigative journalists have begun to conduct analyses of the data that has been made public thus far, resulting in increased media interest about payments to physicians.

The next wave of transparency appears to be between biopharmaceutical manufacturers and medical societies. In late 2009, Grassley sent letters to 33 medical societies requesting a record of payments made by pharmaceutical and device manufacturers. Some of these societies responded by reporting the details of all payments made by each company between 2006 and 2009, some did not respond, and some stated that their associations had protocols in place to ensure that no organization or company could exert undue influence over them.

At the time the letters were sent, Grassley stated that, “These organizations have a lot of influence over public policy … [and] … there is a strong case for disclosure.”

In June 2010, the Wall Street Journal reported that two medical societies submitted letters to the U.S. Food and Drug Administration (FDA) in support of a citizen petition supporting the interests of a drug manufacturer under the FDA’s citizen petition process. The newspaperreported that the medical societies did not disclose to the FDA that they had a financial relationship with the drug manufacturer and suggested that the manufacturer directed the societies to submit letters to the FDA in support of the manufacturer’s interests. The Wall Street Journal reported on an email sent from the CEO of one of these societies in which he states that his organization “has no history of making similar comments to the FDA,” but “when something is important to any of our partners that we have a long-term relationship with, we want to give any issue that is important to our partner careful consideration.” Shortly thereafter, Congress requested the drug manufacturer to turn over its internal documents detailing the relationship with the two medical societies.

In May, Congress sent a letter to the commissioner of the FDA asking what steps it was taking to ensure the “integrity and transparency of the citizen petition process.” Further, the letter stated that “patients can benefit from collaborations between pharmaceutical companies and physicians and medical organizations. However, to ensure accountability, these financial relationships ought to be disclosed to the public.”

Given the recent actions and statements by Congress (and Grassley), it appears the transparency of the relationships between biopharmaceutical companies and medical societies is becoming similar to the transparency requirements currently in place for physicians. Companies should review and update their policies to reflect how business operations engage and interact with medical societies, and how funding requests should be triaged and approved by the company. These relationships may someday become part of the next transparency initiative and made public.

Deputy General Counsel

Matt Allegrucci

Matt Allegrucci is deputy general counsel, legal affairs at Daiichi Sankyo Inc. He can be reached at mallegrucci@dsi.com.